2014 (Taxation) Bar Exam Questions: Question 26

[Answer / discuss the question below. Or see 2014 bar exam Taxation Instructions; 2014 Taxation essay and multiple choice Questions: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28 and 29; See also 2014 Bar Exam: Information, Discussions, Tips, Questions and Results]

XXVI.

Freezy Corporation, a domestic corporation engaged in the manufacture and sale of ice cream, made payments to an officer of Frosty Corporation, a competitor in the ice cream business, in exchange for said officer’s revelation of Frosty Corporation’s trade secrets.

May Freezy Corporation claim the payment to the officer as deduction from its gross income? Explain. (4%)

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